Restructuring Agreement definition

View the related practice notes about Restructuring Agreement

Formal creditors' committee in a restructuring

Formal creditors' committee in a restructuring In many restructurings, the early creation of a creditors' committee (or steering committee) will greatly assist negotiations between the debtor company and its creditors, often resulting in a speedier resolution and better returns to creditors as a whole. The committee may be formal or informal/ad hoc (see Practice Note: Informal creditors' committee in a restructuring) and is usually formed of creditors within the same class. The committee will last until either a successful restructuring is agreed and implemented, or until the collapse of restructuring negotiations. There are no statutory rules or best practice guidelines on the creation of committees in a consensual restructuring (unlike formal insolvencies where Statements of Insolvency Practice (SIPs) 15 and 6 apply—see Practice Note: Statements of Insolvency Practice—a quick guide, SIP 15, which provides guidance to insolvency practitioners on reporting and providing information to committees, and also this guide which R3 has produced to help creditors understand the role of a committee and their responsibilities if...

Table comparing European directors' duties

Table comparing European directors' duties Introduction Some European countries only have a cashflow test for insolvency, others have a balance sheet test and some have both. Some countries also have a share capital test in addition (see Practice Note: European directors' duties) requiring the directors to take certain action if share capital falls below a certain threshold. Additionally, certain countries impose onerous liabilities on directors of companies entering the zone of insolvency. Country Cashflow or balance sheet test Share capital test Duty to file for insolvency Directors' liabilities Austria Cashflow (ie illiquid) or balance sheet (over-indebtedness) Without undue delay and at the latest, within 60 days of the company becoming illiquid/over-indebted. Legal representatives are liable if they (wilfully or negligently) breach their duties (ie the duty to file for insolvency), and liable to the company’s creditors if they (wilfully or negligently) breach statutory provisions that protect the company’s creditors.Office holders may further be personally liable for the company’s debt up to...

View the related precedents about Restructuring Agreement

Letter to lenders governing appointment of creditors’ committee

Letter to lenders governing appointment of creditors’ committee To: The persons listed in Schedule 1 to this letter [insert names of Lenders] From: [insert name of solicitors for the Creditors' Committee or the name of the Chair] Date: [insert date] Appointment of Creditors' Committee We refer to the discussions at the meeting of creditors convened by [insert name of debtor company] (the Company) to discuss the proposed restructuring. 1 Definitions and interpretation 1.1 Definitions In this letter, unless otherwise provided: Business Day • means a day other than Saturday, Sunday and public holidays when clearing banks generally are open for business in London; Chair • means the Lender appointed to chair the Creditors' Committee under the Creditor's Committee Agreement; Commitment • means (a) any undrawn amount which a Lender has committed to make available to the Company (but excluding any undrawn uncommitted amounts); (b) the principal amount of a Lender's participation in any utilisation by the Company, in each case under the Finance Documents; Committee...

Confidentiality agreement — restructuring & insolvency

Confidentiality agreement — restructuring & insolvency This Agreement is made [insert day and month] 20[insert year] Parties 1 [insert name of debtor company] a company incorporated in [insert country eg England and Wales] under number [insert registered number] whose registered office is at [insert address] (the Company); and 2 The Creditors (as set out in the Schedule) (the Creditors); (each of the Creditors and the Company being a Party and together the Creditors and the Company are the Parties). Recitals (A) the Company agrees to disclose information to the Creditors and the Creditors agree to keep that information confidential and use it solely for the purposes of evaluating, negotiating, monitoring and implementing a [Standstill Agreement OR Restructuring Agreement]. (B) [insert any further recitals]. The parties agree: 1 Definitions and interpretation 1.1 Definitions In this Agreement, unless otherwise provided: Authorised Person • means any officer, employee, director, consultant, agent, affiliate or representative of the Creditors [the Reporting Accountant] and any other legal or financial...

View the related q&as about Restructuring Agreement

How do you convert inter-company debt into equity? What are the advantages and disadvantages for the company and its shareholders?

How do you convert inter-company debt into equity? What are the advantages and disadvantages for the company and its shareholders? This Q&A deals with the question of whether an inter-company debt can be the subject of a debt for equity swap. It looks particularly at some of the advantages and disadvantages for the company and its shareholders in making such a conversion. The Q&A assumes that both the debtor and the creditor companies are private companies limited by shares and that no part of their group is listed. There is no reason in principle why an inter-company debt within a private group should not be the subject of a debt for equity swap. Such a swap involves shares being issued in return for the release of all or part of the debt obligation. For other debt management options, see Practice Note: Debt waivers, extending maturity and debt rescheduling. Valuation considerations The directors of the debtor company will need to agree the type and number of shares...